Active Investments: A Lot of Hope is Dangerous

By Steven Lockshin via

Hope. It is the only thing stronger than fear. A little hope is effective. A lot of hope is dangerous. A spark is fine, as long as it’s contained.

A Lot of Hope Is Dangerous

Hope springs eternal; especially among the proactive management crowd. But hope isn’t a good plan. The data simply does not support the idea that active investments can outperform the market over longer periods of time. Passive management, as many studies have demonstrated, almost always wins out in the long term — both because it’s inherently more tax effective and because it’s less costly.

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